- Solid for some large caps ( AAPL the clear winner of season, but some consumer discretionary, financials and tech names also impressing; NFLX up +30% on the month to give an example).
- European which is an obvious risk-on factor.. I expect some comments over the weekend regarding this matter.
- Short-term technicals suggest we're at oversold/support levels (trading near the lower Boll band, and tightening bands; positive divergence on the daily ; trading inside the , which suggests indecision more related to range-trading than a downtrade).
All taken into consideration, I am wary that sentiment is becoming more by the day on the market; hence I'm placing a stop at the lower (maybe a bit lower to avoid algo stop-hunting), and also hedging with long USTs positions.
The rationale of the trade is LONG but only for the week (I think a triangle formation is coming to shape here, so obviously makes sense to go long at these levels). I do think equities are headed for lower lows in the remainder of the year, but this is not the time to start the downtrend.
PS: Bullard Warns of Asset Bubble Risk If Fed Keeps Rates Too Low... watch out for panic selling ahead of an early June hike! That would be a clear sell signal. But for now we're heading for a triangle, not .